DeSantis planned to punish Disney. Removing its tax status may hurt taxpayers.

Gov. Ron DeSantis signed a bill into law on Friday, revoking Disney World’s designation as an “independent special district,” as he had sought, to punish the company for its stance on social and educational problems.

Even though the plan will reduce Disney’s authority, it could have a substantial financial impact on the counties where the theme park is located in Orange and Osceola. Officials warn that if Disney’s debts are passed to the two counties, the result will be higher taxes for all residents.

An overview of what is currently taking place:

In Florida, is it truly true that Disney is run by separate governments?

After the Reedy Creek Improvement District was founded by the state of Florida is 1967, the Walt Disney Company gained near-total control over all of the area’s theme parks and attractions. The 25,000-acre property in Central Florida encompasses an area of more than 40 square miles.

Disney operates in the same manner as a county government, developing and maintaining municipal infrastructures such as power, water, and roads, as well as providing police and fire protection. It even can tax itself. However, while the agreement provided Disney with greater power, it also allowed counties to avoid incurring the costs of providing costly new services and infrastructure in what had previously been considered an outlying portion of the state.

Sen. Ron DeSantis signed Senate Bill 4-C, which has implications for Reedy Creek and five other autonomous special districts that were established before 1968, into law.

What is the reason behind Disney moving its debt?

According to a financial impact analysis conducted by the Florida Senate, when a county takes over a special district, it “must also assume all indebtedness of the preexisting special district.” Disney’s local governments may be obligated to pay at least $1 billion in bond debt.

Following an investigation by the state Senate, it was discovered that residents and businesses in special districts, as well as local governments that will inherit debts and assets, would experience “indeterminate financial repercussions” as a result of the legislation.

A considerable impact on the local tax environment is expected, according to Scott Randolph, a Democrat who serves as the tax collector for Orange County, as a result of the change.

‘If Reedy Creek goes away, the $105 million that it earns to operate services disappears,’ says Randolph. “Even though Orange County has its own set of taxes, this does not simply transfer to the county. However, Orange County is left with the burden of the rest of the state’s debt.”

According to Randolph, Disney pays $53 million in taxes per year to repay its debts.

Property taxes in the county are projected to rise significantly shortly as a result of the current economic climate. Randolph was interviewed by Danielle Prieur of WMFE in Orlando, who made the following statement: “Local taxpayers may face a 20 percent rise in their property taxes as a result of the gap being made up by the state. Even if such were the case, it would almost certainly be insufficient to make up for the losses.”

Is there a compelling reason for Florida to take this step at this time?

After DeSantis requested it on Tuesday, the Florida Legislature required only three days to introduce and pass the legislation. The special session was originally meant to address the state’s redistricting attempt but was repurposed to address other issues.

DeSantis received contributions from Disney during the 2020 election campaign, demonstrating the importance of the company in Florida. A facial covering was required for COVID-19 immunization, however, the corporation did not agree with his viewpoint on either issue. The growing rift became even more pronounced last spring when DeSantis accused Disney of embracing “woke” religious ideas and practices.

Tensions erupted recently when Disney CEO Bob Chapek stated that he would support the repeal of Florida’s Parental Rights in Education Act, also known as the “Don’t Say Gay” law “….. ” According to DeSantis, at the time, Disney had ‘over the line’ in his opinion.

What exactly does this legislation mean for Disney and the Florida counties?

The new law will go effective on July 1, 2018. The significant adjustments, on the other hand, will take effect on June 1, 2023. Orange and Osceola counties will be given new responsibilities as a result of the dissolution of six special districts by legislators.

According to WMFE’s Prieur, Disney was in command of the ambulance and fire departments at the time. To put it another way, the county must now figure out how to deal with — and bear the financial burden of — any medical emergency that may arise in the future.

“In addition, Disney will now seek approval before expanding any of its magnificent theme parks, hotels, restaurants, or adding any brand-new attractions or rides to their existing properties. There is a significant increase in bureaucracy currently.”

There are still several unsolved questions regarding the administration of the new legislation and its implications for city governments. Alternatively, Disney and other affected districts could agree on a new arrangement before the official switchover: If the districts are dissolved on June 1, 2023, the legislation provides that they may be “reestablished on or after that date” as long as they comply with applicable state law.